Ezra -- What would have been the financial consequences of an economy based on a 1965 U.S. distribution of wealth on the capacity of the middle class to pay mortgages, and lighten the load on Medicaid, food stamps, etc, not to mention the currently bulging prison systems, and on the national debt?

Ezra -- What would have been the financial consequences of an economy based on a 1965 U.S. distribution of wealth on the capacity of the middle class to pay mortgages, and lighten the load on Medicaid, food stamps, etc, not to mention the currently bulging prison systems, and on the national debt?

And what would be the financial consequences of a 1965 distribution of income tax burden where people actually had a dog in this fight? Currently, 47% pay little or no tax and many even receive back more than they put in.

"Currently, 47% pay little or no tax and many even receive back more than they put in."

But that is not the whole picture. As Paul Krugman observed a few days ago:

"So the right is now apparently outraged at the fact that many Americans pay no income taxes — a true observation that is elided into the utterly untrue assertion that many Americans pay no taxes. (Almost everyone pays payroll taxes, everyone pays state and local sales taxes, etc.)

This isn’t new; remember the famous WSJ editorial about the lucky duckies who have the great good fortune to not pay income taxes because they’re, um, too poor to be above the minimum. I guess luck is in the eye of the beholder.

The thing to bear in mind is that overall, the US tax system isn’t actually that progressive: the payroll tax is regressive, as are most state and local taxes, which largely offsets the progressivity of the income tax.

So the right likes to pretend that the income tax is the only tax; it isn’t."